President Javier Milei plans to issue an Emergency Decree to approve a new IMF loan aimed at reducing national debt and strengthening the Central Bank. Congressional approval is required to validate this decree. Economy Minister Luis Toto Caputo indicated the agreement is set for early 2025, while IMF spokesperson noted Congress’s approval is not necessary for fund disbursement, though it would expedite the process.
In a significant development, Argentine President Javier Milei intends to issue an Emergency Decree (DNU) to authorize a new loan agreement with the International Monetary Fund (IMF). This announcement was made by the Casa Rosada on Thursday. As stipulated by law, each DNU necessitates congressional approval to remain valid.
The new loan arrangement aims to eliminate National Treasury debt with the Central Bank, which will contribute to a decrease in total public debt and enhance the Central Bank’s financial stability. It is expected that this will subsequently enable the lifting of exchange restrictions.
The Office of the President (OPRA) stated, “The program will allow strengthening the Central Bank’s balance sheet, an essential milestone to consolidate stability and continue the disinflation process.” This agreement will initiate a public credit operation intended to cancel the existing debts to ensure a reduction in overall public debt.
In its communication, the OPRA emphasized that enhancing the Central Bank’s balance sheet is crucial for maintaining monetary and macroeconomic stability. This strategy aims to address the inflation crisis that has severely impacted the Argentine populace, underscoring the urgent need for congressional commitment in this fight against inflation.
Economy Minister Luis Toto Caputo confirmed that the agreement is anticipated to commence within the first four months of 2025. He reassured stakeholders that the IMF did not require any devaluation, and these new funds are designed to recapitalize the Central Bank while avoiding increased debt and facilitating investment through lower taxation.
Furthermore, IMF Spokeswoman Julie Kozack remarked that Argentina’s Congressional approval is not mandatory for the IMF’s board to authorize the US$20 billion disbursement aimed at covering debt maturities. However, she noted that obtaining Parliamentary approval would expedite the overall process.
In summary, President Javier Milei’s plan to approve a new IMF loan through an Emergency Decree demonstrates Argentina’s commitment to tackling inflation and improving economic stability. The proposed measures, which require congressional backing, are designed to reduce public debt and enhance the Central Bank’s financial health. With the collaboration of Congress and the IMF, Argentina aims to foster a more robust economic environment for its citizens.
Original Source: en.mercopress.com
